Hello? Remember The Deficit?
The sad fact about Campaign '96 is that honest talk about balancing the budget is being shunted aside--even though the pols and the public say they really want to eliminate the deficit. Bob Dole is peddling huge tax cuts, Bill Clinton demagogues about Medicare "cuts", and voters complain about congressional lawmakers who tried to trim their favorite programs. Only Ross Perot is telling the truth about the budget--and he's at 5% in the polls. Maybe everyone will get serious about the problem after the election, but given the shameful exhibition of the past few weeks, don't bet on it.
Indeed, the progress made in reducing the federal deficit is about to be reversed. After four years of decline, the deficit will soon turn upward. The 1996 deficit looks like it will come in at $110 billion, down from $290 billion in 1992. But Congressional Budget Office estimates for the new 1997 budget call for the deficit to rise to $150 billion--and higher in years to come.
With Social Security and Medicare off the table, the only place in the budget to cut is discretionary spending. But before rushing home to campaign, members of the first Republican-run Congress in 40 years--elected on a promise to make government smaller--voted to spend $16 billion more on defense and domestic programs to improve the GOP's chances of keeping control of Capitol Hill next year. President Clinton insisted on extra dollars for educational aid and environmental protection for the new fiscal year that began Oct. 1. As a result, the so-called discretionary budget for federal agencies will grow to $503 billion in 1997, up from the GOP's original ceiling of $487 billion. Add in the automatic growth in entitlement spending, and there goes the effort to balance the budget by 2002. This isn't good news for the economic growth.